Nov-29-1999
Forbes.com
Conspiracy Theory
Seth Lubove

The lawsuit by X-Files star David Duchovny is a window into Rupert Murdoch’s masterly vertical integration strategy.

AS FBI AGENT MULDER ON Fox’s hit television series The X-Files, moody actor David Duchovny investigates far-fetched conspiracies and creepy aliens. Now, in a high-profile case, Duchovny is charging the parent of the show’s producer, Fox Entertainment Group, with a dark conspiracy to stiff him on the profits.

Whatever the merits of Duchovny’s claim, his lawsuit is doing a great job of illuminating Rupert Murdoch’s media empire. (Fox is an 83% -owned subsidiary of Murdoch’s News Corp.; see story, p. 120.) As a strategist of vertical integration, Murdoch has few peers. The lawsuit is a direct attack on such integration strategies.

The X-Files, from which the Fox network could haul in $1 billion in advertising profits through this season, is a classic example of how the theory is supposed to work. The show touches nearly all the corners of Murdoch’s global holdings, thus enhancing the value of the larger enterprise (see chart).

“This model of vertical integration, of which we’re in the forefront, is the model of the industry,” crows Peter Chernin, president of both Fox Entertainment Group and News Corp. and Murdoch’s No. 2 executive. “Disney buying ABC or Viacom buying CBS are attempts to duplicate what we have.”

But with vertical integration come lawsuits from actors and producers claiming that they were shortchanged on profit-sharing deals when the broadcasting appendage of a media empire bought a show on the cheap from the producing part. Duchovny’s trial attorney, Stanton (Larry) Stein of Los Angeles, has become a one-man cottage industry of the suits, having represented M*A*S*H star Alan Alda and the producers of Home Improvement in similar cases.

In this case, Stein and Duchovny’s other lawyer, Peter Nelson, prepared a complaint that reads like a paranoid script from the X-Files itself. Fox is accused of “corporate greed” and “avarice” in allegedly peddling the show for a lowball price to its television and cable units. Fox’s vertical integration strategy is a “corporate scheme.” The studio is in a “conspiracy” with the show’s creator, Chris Carter, to pay Carter “millions of dollars in ‘hush’ money” to cover up Fox’s “self-dealing with its affiliated entities.” (Carter himself chose Murdoch’s New York Post to rail against Fox for pulling the plug on his latest show. Conspirators make strange bedfellows.)

Chernin denies that the company underpays for the show. But Murdoch has never been bashful about what he is up to. The public offering last year of Fox Entertainment Group, a repository of domestic film, sports and broadcast properties, touted the X-Files as “vertical integration at work.” The show is produced by Twentieth Century Fox Television, premieres on the Fox network, is syndicated by Twentieth Television to the FX cable channel and Fox network affiliates that include 22 Fox-owned stations, and is sold to such Murdoch holdings as British Sky Broadcasting and STAR TV. Twentieth Century Fox Licensing and Merchandising staged a ten-city X-Files Expo road show. A movie based on the series was produced and financed by Fox’s Twentieth Century Fox Film studios. Dozens of X-Files books are published by News’ HarperCollins Publishers. Fox Interactive produces X-Files videogames.

Chernin declines to venture a dollar figure for the value created by X-Files since its debut in 1993. “We’re talking about soft dollars and soft values in so many places,” he says. But Duchovny lawyer Nelson, who helped negotiate the actor’s profit participation deal in 1995, charges that reruns of the show have propped up the value of Fox’s fledgling cable channel, FX, as well as the company’s 22 local television stations.

Duchovny’s specific beef has to do with the amount of money that flows back to the production company portion of the empire in license fees ( $2 million per first-run episode), where he’s entitled to an undisclosed share of the profits.

Suspicious of the lack of reported profits, Nelson hired well-known Hollywood accounting sleuth Philip Hacker to audit Fox’s books. Finding debatable expenses such as an instance in which Fox paid a $300,000 commission to sell publishing rights to the British unit of its own HarperCollins, they concluded that Fox’s distribution arms were paying lowball license fees for the show.

Because of the show’s success as a leading prime-time ad-revenue generator, the lawyers argue that Fox should pay a price comparable to the legal extortion that Warner Brothers extracted from NBC for ER ( $13 million per episode). But not being held hostage by your suppliers is the whole point, Chernin says. “That was a phenomenal event for Warner Brothers and devastating for NBC,” he says. “Those events are neutral for us. All it does is shift value from one side of the company to another.”

Accountant Hacker, who’s been involved in many of the celebrity profit-sharing cases, recalls how the late Walt Disney used to deal with the issue: He didn’t give cuts to actors, period. When Hacker was working for Disney in the 1960s, crooner Bing Crosby demanded profit-sharing to star in the studio’s 1967 flick, The Happiest Millionaire. Fred MacMurray got the part.

Nov-26-1999
Entertainment Weekly
1999 The Year That Changed Movies: Burning Question
Will Lee

[Extract posted By alfornos]

Q: In The X-Files’ season premiere (Nov. 14), Fox Mulder (David Duchovny) undergoes an elaborate and dangerous medical procedure that has all sorts of important repercussions for him, not to mention the future of the world. *So what exactly did they do to Mulder?*

A: The truth, says X-Files executive producer Frank Spotnitz, is back there – two seasons back to be exact. That’s when Mulder was infected by the black oil (remember?). Although it seemed at the time that the alien virus had been cleared from his system, it was actually just lying dormant – until the extraterrestrial hieroglyphics discovered last season reactivated it. The newly potent virus transformed Mulder into an alien-human hybrid equivalent, one with telepathic powers. Enter the Cigarette Smoking Man, who abducts Mulder and, explains Spotnitz, “has the alien material removed from Mulder’s brain and transplanted into his own.” If the operation worked – and right now, we don’t know – the CSM would be a psychic hybrid, resistant to the black oil and the coming alien invasion. Mulder, in turn, is back to being plain old human. So why all the Christ imagery (e.g., Mulder on a cross wearing a crown of thorns)? Turns out Duchovny, who cowrote the episode with Chris Carter, wanted to structure the episode along the lines of Martin Scorsese’s 1988 film The Last Temptation of Christ – in fact, Mulder’s musings on a life that could’ve been were patterned directly after Christ’s dream in that movie. The homage was designed to emphasize the dominant themes for this season: “It’s a conjunction of science and mysticism, of aliens and religion, that we’re starting to develop,” explains Spotnitz. “It’s deliberate on our part, to help bring all the mythologies together into one story line.” Calls to Oprah were not returned.

Nov-25-1999
Tribune
Kiss and Tell
Allan Johnson

Sorry, `X-Files’ fans, the producer promises the latest Mulder-Scully lip-lock is just a tease

In a way, it’s too bad Sunday’s episode of Fox’s “The X-Files” is getting more attention for what happens near the end than it does for its plot.

The paranormal series is giving a final send-off to its sort-of-sister “Millennium,” producer Chris Carter’s moody, dark show about visionary ex-FBI profiler Frank Black’s (Lance Henriksen) battle against a shadowy organization near the end of the century.

Airing at 8 p.m. on WFLD-Ch. 32, the episode ties up loose ends from the 1996-99 series, which was canceled in May. One of those is the fate of Black, whom Carter likens to the typical “hero with the weight of the world on his shoulders.” The episode also features a former member of the nefarious Millennium Group’s plot to raise the dead and use them to wreak havoc in the new century.

But more attention has been focused on one of the most anticipated moments in “X-Files” history: a kiss between special FBI agents Fox Mulder (David Duchovny) and Dana Scully (Gillian Anderson).

The actors have kissed on-screen before. Once a shape-shifter posed as Mulder got Scully drunk and put the smackdown on her. Another time it was a Scully-lookalike from 1939 from whom a time-traveling Mulder stole a smooch. And in the “X-Files” movie, the couple’s lips brushed slightly before Scully got stung by a virus-carrying bee.

But never have Scully and Mulder done the lips-on-lips thing as themselves. And before fans of the show think they should be especially thankful this weekend because of the kiss, listen up. “X-Files” creator Carter says there will be no romantic entanglement mixed in with alien- and-mutant investigations.

“I’ve resisted any temptation (of romance) because I don’t think it’s right for the characters,” says Carter. “For me, the passion and the protectiveness of one towards the other is something that we all admire and envy because that kind of trust and caring happens so infrequently in life. When it does, it is transcendent.”

Carter says the relationship between Mulder and Scully has never been about sex or romance. It is the closeness between partners that most law enforcement types share that is at the center of their bond. It is also the closeness of two best friends, which in many cases can be as special and deep as a love affair

“Sometimes (viewers) don’t realize how protective Mulder is of Scully, and how noble and masculine and good that is,” Carter says. “They see it as two people who kid each other and are playful and protect each other in the most common senses of the word. But he’s very protective of her as a woman.” Carter adds that Scully is just as protective of Mulder.

Carter, the 43-year-old California surf bum/surfing writer who was brought into the Disney family 13 years ago to work on television movies, also was protective about his other series, “Harsh Realm.” But that didn’t stop Fox from canceling the show about soldiers fighting in a virtual reality war after only a couple of episodes.

Carter says Fox entertainment chief Doug Herzog didn’t “get” the concept behind “Realm,” and might not get “The X-Files’ ” mandate of monsters, mutants and government coverups. Herzog, on the other hand, has said he loves having Carter as part of the Fox family.

Carter says if he does another series (he has a pilot idea he would like work on in the spring), “I certainly want to do it at a place where they’re going to support it. They’re going to nurture it and they’re going to make sure that they’ve done everything they can to get it to its audience. And I believe that was just not the case with `Harsh Realm.’ ”

He also says Fox has approached him about another season of “The X-Files,” but Carter says some “hurdles . . . I’ll quote them,” have to be cleared up. Probably the largest hurdle–in addition to Herzog getting a clue about the show–is his and Duchovny’s contracts are up at the end of this season.

(Carter adds he is enjoying a healthy working relationship with Duchovny, the tired-of-the-show actor who is suing Fox for selling repeats of the show to its FX cable network rather than putting the show on the block to the highest bidder.)

Also a consideration is Anderson, whose contract runs for another season. She, too, is “tired” of working on the show, Carter says, and has said this will be her last season as well.

This season Carter and his producers are “telling just good, scary stories again” and not doing as many lighthearted shows as they did last season. They have enough material to either end the series this May or go another season, plus the game plan calls for another “X-Files” movie in 2001.

Meanwhile, FX is airing a nine-hour “Millennium” marathon Sunday with host Lance Henriksen and featuring episodes that closely relate to and lead up to the “X-Files/Millennium” crossover at 8 p.m. The “Millennium” marathon starts at 11 a.m. And the cable channel airs its 14-hour “X-Files” marathon at 11 a.m. Thanksgiving Day, with fan-selected episodes in 11 categories, including “Best Mulder/Scully Chemistry,” “Best Scully Episode” and “Best Mulder Episode.”

Nov-05-1999
Christian Science Monitor
Interview with Vince Gilligan
Katherin Dillin

Seeing the story helps writer keep ‘The X-Files’ ‘out there’

You don’t have to believe in UFOs or government conspiracies to write for “The X-Files.”

“We’re all fairly agnostic on all those subjects…,” says Vince Gilligan, co-executive producer and writer, in a recent phone interview from Los Angeles about what it’s like writing for a hot TV show. “I don’t disbelieve in any of this stuff we write about, but there’s a big difference in not disbelieving it and actively believing it.”

“The X-Files” heads into its seventh and perhaps final season this Sunday, Nov. 7 (Fox, 9-10 p.m.) as contracts for the show’s creator, Chris Carter, and one of its stars, David Duchovny, run out. Launched in 1993, it found an audience primed for a one-hour drama about two FBI agents who investigate cases involving alien abductions and government conspiracies.

Mr. Gilligan, whose scripts reveal a deft if sometimes dark comic touch, says that since the Watergate scandal that brought down President Nixon in the ’70s, “we’ve lost a lot of innocence … a lot of respect for government … and maybe this [show] taps into those feelings.”

“X-Files” also taps into America’s love of movies. “We really try hard to put … a one-hour movie on television every week. We tell our stories visually more than verbally,” says Gilligan, who joined the show in 1995. Most TV shows are dialogue-based, whereas “X-Files” and big-screen movies rely on scene direction (visual cues), he adds.

“The process of being a writer is to picture the scene in your head,” he says. “It’s almost like closing your eyes and watching it play out in your imagination and then just getting it down on paper.”

Gilligan was a fan of the show from the start. “I was home alone one night. I saw an advertisement or two for this new show called ‘The X-Files’ … I was literally hooked about 15 minutes into it.” He liked the charismatic characters – Fox Mulder, the intuitive UFO believer, and Dana Scully, the scientist and skeptic.

Gilligan sums up the two this way: Mulder is a “quixotic hero; he’s always tilting at windmills, he’s always fighting the good fight, and it makes him a very romantic hero…. Scully is every bit as appealing … she’s more down to earth.”

As for whom he’d follow into a UFO hunt, “Most of us would be much more comfortable in the presence of Scully than Mulder…. We’d all be tagging along with Scully saying, ‘Mulder, you’re out of your mind….’ As Chris Carter always said … ‘Mulder is the main character, but Scully is the eyes that we the audience watch the show through.’ ” Gilligan found his way into the TV writing business via the movies. He went to film school at New York University, wrote a script for his senior thesis titled “Home Fries” (released in 1998), and entered it into a contest called the Governor’s Screenwriting Competition, sponsored by his home state of Virginia.

As one of the 1989 winners of that competition, his script drew the special attention of a panel judge, producer Mark Johnson (“Good Morning, Vietnam,” “Rain Man”), who often teams with well-known director Barry Levinson.

“He’s still my mentor,” Gilligan says. “He produced ‘Home Fries,’ and I still work with him every chance I get.”

Screenplays and TV scripts offer different rewards and different kinds of heartbreak, but they’re both “a lot of hard work,” he says. With movies, “You can live anywhere … you can live on some island in the middle of the Pacific and e-mail your stuff around.”

In TV, “the writer is not only taken seriously, but the writer is very often the boss, the final arbiter [who] has the final say in matters ranging from the stories that are told to the look of the cinematography to the editing to the casting to the music….”

Writing for TV also means that “your life is not your own.” On “The X-Files,” the eight writers spend about 12 hours a day, sometimes seven days a week, pounding out scripts. Schedules are relaxed as the season starts, but later, when the “[script] pipeline is empty,” days get longer, deadlines are cut from three weeks to 10 days, and scripts can turn into a team effort, with different members tackling one of the four acts that make up each show. There’s a three-week break in May. Says Gilligan: “Three weeks is great, but by the end of the season three years would be [even better].”

Unlike movies, in TV, there’s the pleasure of seeing your work aired only a week or month after it’s written. “You’re watching it on TV along with millions of other Americans. And that’s the whole point of being a writer, to get your stuff made and to share it with people.” With movies, scripts often never get filmed.

This season will kick off with a two-part mythology (“The Sixth Extinction” and “Amor Fati”) written by Chris Carter and Frank Spotnitz. It picks up where last season ended with Mulder gone mad. Gilligan, who will write or co-write seven or eight episodes this season, provides the season’s third episode, “Hungry” – a scary and humorous story from a monster’s point of view. “I’m as proud of that episode as I’ve been of any of them that I’ve ever written,” he says.

This season, Mulder will undoubtedly still pursue extraterrestrials and Scully will continue her Spock-like interrogations of “Spooky” Mulder. But the question remains: Is an eighth season “out there?” Gilligan can only say that those who work on “The X-Files” are also “wondering what the future is going to hold.”

Nov-05-1999
New York Post
‘Harsh’ words for network boss
Don Kaplan

“X-FILES” creator Chris Carter is fuming that Fox TV chief Doug Herzog canned his new sci-fi show “Harsh Realm” after only a few episodes.

Now, the conflict has clouded the already uncertain future of the “X-Files.”

“I don’t think that the man who is running the network now got the show or even watched it,” Carter told The Post yesterday. “Someone over there made the decision [to yank it]. [Herzog] was the one that delivered the message – so I blame the messenger.”

“Harsh Realm,” a military-themed series set in a virtual reality world, struggled to find viewers since its debut on Oct. 8.

The bad situation was the result of Fox not heavily promoting “Realm,” Carter claims – not its murky storyline that some TV critics labeled as confusing.

“The ratings weren’t great,” Carter admitted, “but ‘Harsh Realm’ was never considered on any other merit.”

Fox “decided to put all their eggs into other baskets,” Carter said. “The viewer awareness, which had been very high early in the summer, had slipped to a pathetically low number – people just didn’t know the show was on.

“I guess [canceling it] was a quick way of trying to stop the bleeding of a much larger wound,” Carter said.

“I have enormous respect for Chris Carter’s work, and I regret as much as he does the failure of ‘Harsh Realm,'” Herzog responded to Carter’s accusations. “But I do believe our ongoing discussions with Chris are best conducted in private, not in the press.”

Meanwhile, the seventh – and what may very well be the final – season of the “X-Files” kicks off Sunday night, picking up where last season left off: FBI agent Fox Mulder (David Duchovny) has gone crazy and is locked away in a padded cell, while his partner, Dana Scully (Gillian Anderson), is in Africa looking at what appears to be a spaceship hidden underwater near a beach.

But the series’ season premier is overshadowed by a slew of behind-the-scenes problems. Both Carter’s and Duchovny’s contracts expire this year – Anderson has one more year on hers – and Duchovny is suing Fox and Carter for allegedly selling the “X-Files” syndication rights to other Fox-owned stations at bargain-basement prices.

“We just haven’t spoken about business,” Carter said, pointing out that despite their differences, the two successfully collaborated on writing an upcoming episode.

“A lawsuit creates its own environment; it’s just a little different,” Carter said.

Also, neither Carter nor anyone else on the show has been told yet if it will return next year.

“We know where we’re headed,” Carter said. “We’re talking about a pivotal two-part episode arc that would air in February that would lead us to the end.”

The scope and meaning of the arc will depend on Fox’s decision on keeping the show on the air, Carter said.

Nov-04-1999
Newsday
Is the Future Out There?
Verne Gay

(The Long Island daily newspaper)

“The X-Files” has become the X factor for a struggling Fox.

Poor, poor Fox. Imagine the painful musings that are now going through executives’ heads: “No one is watching us … no one is watching us.” The mantra has picked up in recent days. No matter what we do, what we put on (with the exception of “Ally McBeal’s” premiere) the song remains the same. No one is watching Fox.

And no one knows exactly why.

The numbers tell a particularly brutal tale. Last week – with the World Series airing Tuesday and Wednesday – virtually all Fox’ shows drew under a 10 percent audience share. The exception was Sunday, when an NFL overrun dragged some football fans into the prime-time schedule. So far this season, Fox’ regular shows are tracking more than half a rating point behind last year’s performance.

Fox has already canceled two shows (Harsh Realm, Ryan Caulfield: Year One), shelved two others (Family Guy, Action) and pulled one (Manchester Prep) even before a single episode aired. The network is now airing movies on Friday, throwing “trash” specials into other holes, and praying hard – that the new Chuck Woolery game show, “Greed,” which premiers tonight will not sink into the muck that has become its new season.

Executives don’t really want to talk about the fall and for good reason: They have no answers. There have been rumors – all unsubstantiated – that new boss Doug Herzog is about to take a bullet for the merging fiasco. That’s unlikely to happen, just yet. Herzog’s not to blame. He’s a newcomer (from cable’s Comedy Central) with some good ideas (Action) and some bad luck, who is saddled with a scheduling strategy sanctioned by Rupert Murdoch. But then no one is going to fire Rupert, are they?

So what gives? First off, “The X-Files” premieres Sunday, and Fox without “Files” is like NBC without “ER.” The premiere is a good and appropriately creepy continuation of last year’s season-ender, and the episode should do a big number.

Also, Fox typically has a poor October. Last year at this time, a bunch of new shows were canceled and another entertainment president (Peter Roth), took an early vacation. Then the rest of the season turned around – even though that was accomplished mostly by sensational “shock TV” specials.

Veteran TV observer Paul Schulman, president of Schulman/Advanswers NY (a media buying firm), says that “the biggest problem that Fox has is that they started the season late, and when you start “Files” in November, the hour version of “Ally” and “Party of Five” in October, you are, in effect, losing the promotional platform for your new shows.” He adds, “it also hurts that those who did tune to their new shows rejected them.”

Yes, indeed. But others just might argue that Fox’ biggest problem has to do with Chris Carter and Frank Spotnitz, the two guys who produce the network’s biggest show. Most people now assume that “The X-Files” will end this season; both David Duchovny (who is suing Fox for back-end profits) and Gillian Anderson have indicated they want out.

But in the strange netherworld that is Hollywood, the following could also happen: Fox, desperate to keep “Files” for an eighth season, could settle Duchovny’s suit and pay the producers and “ER”-size ransom to return.

Will they want to? Both Carter and Spotnitz were stunned when their “Harsh Realm” was dumped after just three airings. In an interview, Spotnitz says that “it seemed like a panicked, irrational decision. They came to us before the show debuted and said, ‘we blew it by not promoting the show. It’s just terrible and we’re going to try and make it up …’ And then, suddenly, it was canceled without any warning whatsoever. There was no discussion, we were not even privy to their line of thinking. So we were shocked.”

Now ask yourself this: If you were president of Fox, would you throw a cream pie in the face of your most important producers? Of course you wouldn’t. But sources say Fox execs were shocked themselves after they learned that the Oct 22 episode of “Realm” was nearly beaten by the WB’s “Steve Harvey Show.” Given that a founder of Fox (Jamie Kellner) now runs the WB, the humiliation was apparently too great to endure.

Spotnitz adds that “obviously we were very unhappy with the way they treated “Harsh Realm” but we love “Files” and we want to keep a firewall between the issues.”

But is the end out there? “You know, it may be, but I don’t know. But from where I stand, not knowing the answer, I’ll act as if it is. I don’t want to find out that it’s too late and [we] haven’t done anything about it. So we’re treating it creatively as if this is the last season. We don’t want to miss any opportunities that last year might give us.”

And those would be: a kiss between Mulder and Scully; an episode starring the magician, Ricky Jay; the return of Lance Henriksen’s character, Frank Black, to complete the storyline for the canceled “Millennium”; and the return of an evil serial killer from an early season who had kidnaped Scully. And may we humbly suggest another idea? An episode about how an entire nation of Fox viewers were abducted by aliens.